Which of the Following Is a Major Type of Foreign

question 72

Multiple Choice

Which of the following is a major type of foreign investment risk that is insurable through government-backed programs?

• A)Lack of funds
• B)Risk of transaction loss
• C)Poor strategic tie-ups
• D)Risks of expropriation
• E)Losses due to natural calamities

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Definitions:

Payback Period

The duration of time it takes for an investment to generate enough revenue to recover the initial cost of the investment.

Profitability Index

A measure used in capital budgeting to evaluate the profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.